Federal Budget 2026-27

Helping you understand what the Budget means for Australian households and businesses.

Budget report

Budget overview

The budget forecasts an underlying cash deficit of $28.3bn in 2025-26 (1.0% of GDP). Higher commodity prices and stronger domestic demand have boosted the bottom line since December’s mid-year update. The deficit is expected to widen to $34.4bn (1.0% of GDP) in 2028-29 as energy prices and interest rates crimp growth.

Main policy decisions

  • The savings package (mainly tax and NDIS) is one of the largest since the mid-1990s. However, the savings are backloaded. By 2036-37, these measures aid the bottom line by 1.0% of GDP, up from 0.1% of GDP in 2026-27. 
     
  • Other notable initiatives target productivity and economic resilience. A national licensing system and harmonising payroll tax administration will help labour and capital flows. Changes to tax arrangements for small businesses and startups may encourage risk taking. Economic resilience will also be helped by the $15bn fuel package and electric vehicle tax concessions being made permanent.
     

Federal Budget 2026–27 with Chief Economist Luci Ellis

Key initiatives^

Budget 2026-27 focuses attention on Australia’s resilience, the cost of living and economic opportunity. The savings package (mainly tax and NDIS) is one of the largest since the mid-1990s, but the benefit is backloaded.

Defence spending

$53.0bn

Over 10 years to strengthen capacity to deter and respond to threats.

Hospital funding

$18.1bn

Investment in hospitals to improve effectiveness and efficiency of public system.

Tax offset

$6.4bn

Additional $250 annual tax offset for working Australians from 1 July 2027.

Australia’s fuel security

$10.7bn

$7.5bn for fuel and fertiliser security facility, and $3.2 to establish fuel security reserve.

Pharmaceutical Benefits Scheme

$5.9bn

Pharmaceutical Benefits Scheme new and amended listings.

Fuel cost relief

$2.9bn

Temporary reduction of fuel excise and heavy vehicle charge.

What the Budget means for you

Federal Budget: Quick reactions

Few surprises on the night, a fiscal impulse that is still slightly expansionary, and some significant tax changes and productivity reforms.

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Budget report

In depth analysis of the Budget by our Westpac Economics team.

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Federal Budget Infographic

A snapshot of the headline figures and policy highlights of Budget 2026–27.

 

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Federal Budget insights for financial advisers

Explore BT’s expert analysis of the 2026–27 Federal Budget and understand what the key announcements mean for financial advice professionals and their clients.

Find out more

Things you should know

^ For key initiatives, cost is for the five years from 2025-26 to 2029-30 inclusive, unless otherwise stated.

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